Toyota increases stake in Subaru, deepening partnership to develop new technologies

Toyota will raise its stake in Subaru to 20%, up from 17%, with the two Japanese carmakers looking to deepen their partnership to develop new technologies and reduce costs to remain competitive.

The investment is part of a wider trend among Japanese automakers, with Toyota and Suzuki also agreeing to acquire small equity stakes in one another.

Japanese automakers partner up to stay competitive

These tie-up deals are helping Japanese carmakers benefit from economies of scale, reducing overheads and accelerating the development of new technologies to help them compete in evolving automotive market.

“Our companies ...want to pursue the possibilities of making ever-better cars suitable for the CASE (connected, autonomous, shared, and electric) era by bringing together our strengths,” Toyota President Akio Toyota said in a statement.

The pace of change in the auto industry is high, with companies struggling to keep up with transformation driven by electric cars, ride hailing, autonomous vehicles and the rise of the sharing economy.

In time, Subaru plans to become a fully-owned subsidiary of Toyota, with this deal represent the first step towards that goal,’ Takeshi Miyao, Managing Director of consultancy Carnorama, told Reuters.

Looking to invest in Toyota or other automotive stocks? Open an account with IG

Ford and VW to develop electric cars together

Partnerships like these are happening outside of Japan too, with Ford Motor’s and Volkswagen, working together to develop electric and self-driving cars.

‘While Ford and Volkswagen remain independent and fiercely competitive in the marketplace… Unlocking the synergies across a range of areas allows us to showcase the power of our global alliance in this era of smart vehicles for a smart world,’ CEO of Ford Jim Hackett said.